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Westpac has posted a bumper full-year profit and announced a $1.5 billion share buyback.
The bank announced a $7.2 billion full-year net profit, up 26% on the previous financial year.
Westpac’s financial year runs to September 30, as does ANZ’s and NAB’s, which will be reporting their full-year results soon.
The profit came on the back of a 5% increase in loans to $773 billion and a 2% rise in net interest margin (NIM) — basically the gap between what the bank pays to borrow money and the rates it lends it out at — to 1.95%.
Excluding one-off and financial market moves, “core NIM” on the bank’s lending jumped 12 basis points to 1.87%.
The bank also received a big boost from a 36% jump in non-interest income to $3.33 billion.
Westpac’s improved profit came from a 77% surge in profits from its business banking division and a 54% rise in earnings for its institutional bank.
Profits from its consumer banking division fell 7% on reduced margins, while deposits grew 2.5 times as fast as loans.
Despite high inflation across the economy, Westpac managed to reduce its costs by 1%.
However, one negative was a near doubling in loan impairment charges to $648 million, or 0.09% of loans.
The bank will pay a 72 cent a share final dividend, taking the full-year payout to $1.42.
The company will also return money to shareholders through buying back $1.5 billion of its shares.
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